Set-Aside Alert exclusive research:

2-yr trend of reduced small biz set-asides continued in FY2020

Trend began with 43% drop in set-aside awards in FY18

      The two-year trend of sharply reduced use of traditional small business set-asides in federal contracting continued for a third year in fiscal 2020, according to new research by Set-Aside Alert.

      The trend of significantly reduced Full and Partial Small Business set-aside awards that began from fiscal 2017-2019 continued for a third year in fiscal 2020. Such awards dropped by 43%, from $44 billion in fiscal 2017 to $25 billion in fiscal 2018.

      These awards remained low at $27 billion in fiscal 2019 and at $28 billion in fiscal 2020.

Possible reasons for the trend

      With rising federal contract spending from fiscal 2017-2020, it is likely there was less time for contracting officers to focus on small business set-asides. Also, agencies may have had less incentive to create set-asides because many were able to meet their small business goals regardless.

      The growth in category management and so-called “Best In Class” acquisition vehicles also likely contributed to fewer set-asides.

      The shrinkage in set-asides for the last three years already has reduced the market for vendors who rely on set-asides.

      Unless there is a reversal of the trend, those vendors likely will experience more competition and find it more difficult to win set-aside contracts.

Set-Aside Alert’s analysis

      Set-Aside Alert compiled the total awards for Total and Partial Small Business set-asides, total small business awards and Total and Partial Small Business Set-asides as a percentage of total small business awards.

      Total and partial small business set-aside award data is from USASpending.gov, and includes IDIQ contracts and sole-source contracts. All years are fiscal years:

      Meanwhile, during the 2016-2020 period, all federal contracting was increasing dramatically. Total federal contract awards went up by 40%, from $475 billion to $666 billion, during the four-year period (USASpending.gov data).

      Similarly, total small business awards rose to new heights, going up 33% during the same four years (SBA data).

      Total and partial small business set-asides as a percentage of total small business awards fell in fiscal 2018 and fiscal 2019.

      Since SBA totals are not yet available for fiscal 2020, that percentage could not be calculated.

      SBA officials were not immediately available to comment.

More Information:
SBA scorecards: https://bit.ly/3hobE73
USASpending.gov: https://www.USASpending.gov

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